Mutual Fund Investments include investment in Systematic Investment Plan except in cases of Liquid funds, cash funds and floating rate debt funds. All types of Equity Funds, Debt Funds and Equity balanced funds offer SIP schemes for the benefit of their customers. Mutual Fund SIP schemes are also the most popular among employees who plan their post retirement long term investment schemes. The bank requires an account and KYC to start an online SIP account for the investor. Online SIP is now a very commonly used process of Mutual fund investment but one must always be careful while choosing such a plan and providing the confidential information online to either the investment banks or the companies.
Mutual Fund SIP is recommended for all the investors who want to take active part in the share market without much risk or knowledge of the same. SIP helps in a less risky and steady return based investment policy for every individual, firm or company. Systematic Investment Plans also helps in decreasing the average cost per unit of investment, through Rupee Cost Averaging method.
SIP has the facility for the investor to predefine the duration for which he wants to invest, that is, if the scheme will be a long run, short run or very short run investment after which the scheme will be forfeited by the investment bank and the net amount will be handed over to the investor. Some investors may also opt for an infinite time limit by not mentioning the end date. In these cases, by law, the end date is considered as 2099 until the investor decides to stop his investment by issuing a notice before that time. Apart from tax benefits on capital gain, SIP involves less risk and steady returns policies that attract the customers to invest in it. SIP is thus the most popular and in demand Mutual Fund scheme of the country now, and all major investment banks provide attractive SIP schemes to their customers.